Suspicions of US$20M in bribes from Odebrecht

Friday, February 10, 2017

Peru Attorney General to seek arrest of ex-president Toledo

LIMA — A major corruption scandal shaking politicians across Latin America continued spreading across the region on Tuesday as Peru’s attorney general announced he would seek the arrest of former president Alejandro Toledo on charges of laundering assets and influence-trafficking.

Toledo, who was believed to be in Paris, denied any wrongdoing in interviews with news media.

Peruvian prosecutors opened a formal investigation Monday into suspicions that the former president took US$20 million in bribes from Brazilian construction firm Odebrecht, which is at the heart of the regional scandal.

The prosecutors believe Toledo received the money in exchange for giving the firm permission to build a highway connecting Brazil with the Peruvian coast. Attorney General Pablo Sánchez told a local radio station that his office would seek Toledo’s arrest, saying the charges against the former leader were “serious and grave.”

He said that prosecutor Hamilton Castro, who has been heading the investigation of Toledo, would formally deliver the request to a judge for the ex-president’s “preventive detention.”

The alleged payments were believed to have been made through Toledo’s friend, Peruvian-Israeli businessman Josef Maiman, whom prosecutors said Monday they were also investigating along with the Odebrecht’s former boss in the country, whose testimony triggered the probe.

The move came after police searched Toledo’s home in Lima on Saturday. Although he said he has plans to travel to Stanford University in California, where he is a visiting scholar, Toledo has said he would return to Peru as long as he could be assured of a fair trial. “Say when, how and where and in what bank they’ve given me US$20 million,” an angry Toledo said in an interview with a local radio station over the weekend.

Toledo failed to win much support in a bid last year to regain the presidency, finishing in eighth place, but the idea that the pro-democracy activist who led street protest which forced strongman Alberto Fujimori’s resignation might now be joining his arch-nemesis behind bars has come as a shock to many Peruvians.

“It’s a betrayal of the Peruvian people,” President Pedro Pablo Kuczynski, who served as Toledo’s economy minister and prime minister, said in an interview over the weekend. “It’s very sad.”

Authorities in Peru and throughout Latin America have been moving fast to charge officials accused of taking some US$800 million in bribes that Odebrecht acknowledged paying in a plea agreement signed in December with the US Justice Department. The bribes, used to win business in 12 countries, include some US$29 million in Peru for projects built during the administrations of Toledo, Alan García and Ollanta Humala. So far three officials from Garcia’s government have been arrested.

Argentine chapter

The agreement between Odebrecht and US, Brazilian and Swiss authorities includes a recognition that between 2007 and 2014 it paid upwards of US$35 million in bribes with the knowledge that the money would in part end up in the hands of public officials. The payments were linked to at least three public works projects worth US$278 million. One of the payments amounted to US$ 2.9 million and was paid to a third party between 2011 and 2014.

Some 100 Argentine businesses are currently under investigation for bribery charges in connection with Odebrecht projects and among those singled out for prosecution is Julio de Vido, Planning minister in the Kirchner administrations.

However, the Mauricio Macri administration is also implicated in the case, as some allegations point fingers at the president’s close allies and relatives. The head of Federal Intelligence Agency (AFI) Gustavo Arribas allegedly received US$594,000 from a Brazilian moneylender, who was named in the huge corruption scheme know as Operation Car Wash, La Nación reported in January. According to the newspaper, Odebrecht financial operations officer and foreign exchange trader Leonardo Meirelles transferred money to a bank account belonging to the Argentine official on five occasions throughout September 2013, beginning a day after a deal with Odebrecht over the underpass of Sarmiento train line was re-activated. Arribas only admitted a bank transfer of US$70,475 which would belong to part of a payment related to the sale of a property he owned in São Paulo, Brazil.

Arribas is a close friend of the president and “has been by Macri’s side for years, especially during his tenure as Boca Juniors soccer club president.”

In 2007, Odebrecht was awarded a substantial contract to get the emblematic Sarmiento train line underpass, one of the largest infrastructure projects in Argentine history. The Brazilian company won the bid in partnership with IECSA, a building company that Ángelo Calcaterra, cousin to the president, bought from the Macri family.

Due to financial problems, the project has suffered several delays in the last decade until Macri announced in 2016 the state would be in charge of getting the funding, and IECSA took over the project again. It is suspected that the money that Arribas received could have been bribes to ensure that the consortium kept the contract.